Mallya's Force India aim to be a top three team

SILVERSTONE, England (Reuters) - Force India set their sights on breaking into Formula One's top three at the launch of their new car on Wednesday and hit back at suggestions that they lack the budget to match the manufacturers in a spending 'arms race'.

"If we did not dream big, we would not have finished fourth in the world championship last year," said co-owner and principal Vijay Mallya, the embattled former billionaire whose extradition is sought by India.

"We will always dream big," added the liquor tycoon who was charged in absentia last month by India's Central Bureau of Investigation with conspiracy and fraud over a loan to his defunct Kingfisher Airlines. He has dismissed the charges against him.

"We have never had conversations, even in private, that we cannot break into the top three. That is certainly going to be our objective. We are going to give it our best shot."

Force India enjoyed their best ever season last year, finishing behind Mercedes, Red Bull and Ferrari.

Force India's annual budget is estimated at less than half that of the teams above them and also some of those below, such as McLaren.

Renault Sport F1 managing director Cyril Abiteboul told reporters at the launch of his team's car on Tuesday, when he set a target of fifth overall, that he doubted Force India had the resources to compete at the very top.

"I think this season will be an arms race, and I really feel for the teams who are under-resourced," the Frenchman had said. "I believe that most of the car build budget of a Force India will be gone by now, just to cope with the new regulations."

"Good luck to him. He might have to eat his words. It's not the amount of arms you have, it's the quality of your weaponry," said the Indian.

Mallya said the team planned to develop the new Mercedes-powered VJM10 throughout the season but would not a target for podium finishes or points he wanted Mexican Sergio Perez and French newcomer Esteban Ocon to achieve.

"I've always said 'under promise and over deliver'," said Mallya of his approach to Formula One. "And I'm going to stick to that philosophy.

"As much as people may say there is this huge barrier to breaking into the top three, I see no reason why we can't."